The budget’s $5 billion in handouts to individuals may force the Reserve Bank of Australia to abandon short-term interest rate cuts after the jobless rate unexpectedly fell to 4.9 per cent, its lowest reading since the global financial crisis.

While the monthly figures are volatile, employment data for April suggests the resources boom may be creating labour shortages that could drive up labour costs even though manufacturing and finance companies are shedding jobs.

Annual employment growth has accelerated to 4 per cent in the booming economy of Western Australia, where the jobless rate dropped to 3.8 per cent.

After threatening to drop below parity with the US dollar, the dollar recovered from $US1.006 to $US1.0120 following the release of the data as investors decided interest rate cuts were less likely.

The unexpectedly large fall in the unemployment rate was fuelled by hiring in the resources-focused states and Victoria and is a sign the economy may grow faster than forecast in the federal budget.

The budget’s return to surplus is based on the assumption that while handouts to families will spur spending, the swing from deficit to surplus will restrain the economy. The government’s budget strategy counts on further interest rate cuts.

Economists cast doubt on the timing of potential rate cuts after the jobs report. “The key focus over the coming year will be wage costs and productivity,’’ Commonwealth Bank of Australia senior economist Savanth Sebastian said.

With unemployment below 5 per cent even though economic growth has been sluggish and migration is at a 3½ year high, “the concern for the Reserve Bank is what happens to unemployment if activity levels rebound back to trend levels”, Mr Sebastian said.

Employers created 15,500 jobs in April, the Bureau of Statistics said yesterday. Economists had forecast a jobless rate of 5.3 per cent and 5000 fewer jobs.

The monthly net increase in jobs this year has averaged almost 22,000, after stalling in 2011.

Employment Minister Bill Shorten said he was sure the Reserve Bank would take into account forecasts for higher unemployment and the effect of the dollar on domestic demand when assessing rate cuts, “as opposed to just looking at the headline issue of the mining boom or the 4.9 per cent’’.

“People will be surprised at an unemployment rate with a four in front of it,’’ Mr Shorten told reporters in Canberra. “It is good news but we also are realistic enough to know there is softness in parts of the Australian economy.’’

Western Australia posted the nation’s lowest jobless rate. Queensland dropped to 5.1 per cent from 5.5 per cent and Victoria to 5.3 per cent. South Australia was unchanged on 5.2 per cent, and NSW rose to 4.9 per cent from 4.8 per cent. Tasmania deteriorated to 8.3 per cent from 7 per cent.

The unemployment rate for men fell to 4.8 per cent from 5 per cent, and to 5.1 per cent from 5.3 per cent for women.

Economists said the drop in the overall jobless rate was helped by the fact that fewer people looked for work in April. The participation rate eased from 65.3 per cent to 65.2 per cent.

The data adds to evidence, including a rebound in retail sales, that the economy may be recovering from a soft patch at the start of the year.

It has also reignited concern about whether the budget stimulus may worsen labour shortages and stoke inflation.

UBS economist Scott Haslem said for a central bank that is “looking for evidence that inflation is low, in line with weaker demand, unemployment below 5 per cent likely leaves them more patient on rates.’’

Reserve Bank officials warned last week that price pressures may re-emerge if the country fails to boost productivity growth and keep a lid on costs.

“The latest result rings true with the comments,’’ Mr Sebastian said.

The government this week forecast a return to trend gross domestic product growth, and a jobless rate in the present quarter of 5.25 per cent. Unemployment is expected to hit 5.5 per cent in the second quarter of next year.

Tuesday’s budget papers showed that Treasury estimates the rate below which unemployment begins to generate cost pressures – the so-called non-accelerating inflation rate of unemployment, or NAIRU – is near 5 per cent.

Expectations for a June interest rate cut of 0.25 of a percentage point fell to 61 per cent late yesterday from 90 per cent before the report, according to a Credit Suisse index.

He questioned whether yesterday’s jobs data pointed to an “upside threat to inflation’’ after the number of hours worked by employees rose by 2.6 per cent from a year earlier.

That “suggests that the increase in productivity in [quarter] 1 has continued into Q2,’’ he said.

Growth is tipped to strengthen in coming months following last week’s 50 basis point cut in interest rates by the Reserve Bank, which is likely to assist two of the weakest sectors in the economy: retail and housing construction.

The budget handouts include cash payments of up to $820 to families with children going to school.

Former Reserve Bank board member Warwick McKibbin has warned the budget may generate more stimulus to the economy and delay interest rate cuts.